Your credit report is the lifeblood of the credit card points and miles hobby. A great score means that you’ll almost never have to worry about being denied a card when the time comes to apply. A poor score on the other hand, often means that you’ll have to sweat out each application, and you might miss out on some good offers. We’ve gone in depth in the past about how your credit score is calculated, we’ve debunked credit score myths, and talked about how to improve your credit score. I’d encourage readers to check out those articles before proceeding. Today we’re gong to focus on answering a question from Facebook about a line item that a user saw on her credit report. The specific question was:
Credit Karma just alerted me to a change in the remarks for one of my Citibank cards. The remark says “Affected by Natural Disaster”. I didn’t add this nor was I affected by a disaster. So my questions: Do I care about this remark?Should I have it corrected? How did it happen?
Affected by Natural Disaster – What does it mean?
R0109, T0021, E0158. Do those codes look foreign to you? I know they look foreign to me. They’re actually the remark codes for Experian, Transunion, and Equifax respectively. Remark codes are used by credit bureaus to provide additional information on a credit report about the how and why of a particular score. In most cases you’ll see things like “Code 27: Revolving balance too high” as a reason for why your score is not as high as you might like. In special circumstances however, the bureaus will add things like “Affected by Natural Disaster” if you happen to live in an area that was recently affected. This can be helpful in a situation wherein you’re affected by a disaster, miss a payment, and go to request a loan in the future. The lender can look at the code and see that while you did miss a payment, it may have been due to the exceptional circumstances of the disaster and lend to you anyway.
What to do if you are affected by a natural disaster
While sometimes the code can be added automatically, its important to be proactive if you’re affected by a natural disaster. In those cases, if you think you’re likely to miss a payment and/or pay late, or overcharge on your card, its important that you reach out to your lender. Call each one individually to explain your situation. In most cases the banks have processes in place to protect borrowers against these unforeseen circumstances. You may be able to pay less than required, they may grant you temporarily relief for paying late, etc. Moreover, they will also (in most cases) apply the remark code that we mentioned above to your credit report.
Seeing the “Affected by Natural Disaster” remark code on your credit report is not a bad thing and its not going to affect your score in a negative way. In fact, it can be a positive thing if you’re someone who has been affected and has missed a payment (or worse) as a result.